The United States Postal Service (USPS) suffered a net loss of $2.5 billion in the third quarter of fiscal year 2026, which was $562 million lower than a year earlier.
The lower Q3 loss follows a $1.1 billion jump in operating revenues and a decline in workers’ compensation, the USPS said in an Aug. 7 statement. The gains in the third quarter were partially offset by rising expenses related to retirement benefits, retiree health benefits, and compensation and benefits.
Total operating revenue for the third quarter stood at $19.9 billion, up 6.1 percent compared to a year ago. USPS attributed the higher revenue to factors such as continued growth in the Ground Advantage Shipping and Packages service and price increases in First-Class mail.
While USPS handled mail volume marginally higher in Q3 than a year earlier, First-Class mail volumes declined. In total, the agency handled 25.42 billion pieces of mail and shipping.
Commenting on the results, Postmaster General David Steiner said in the statement that USPS was continuing to face a “severe liquidity crisis.”
“Our financial losses this quarter reflect systemic challenges inherent in our Congressionally established business model and regulatory framework,” Steiner said.
“We are taking responsible steps to conserve cash to extend our operating window, but we require thoughtful legislative and other actions to establish a financially sustainable Postal Service capable of serving the American public far into the future,” the postmaster general said.
The postal service had suffered a $9 billion loss in fiscal year 2025, following $9.5 billion in 2024 and $6.5 billion in 2023.
In April, the postal service informed the Office of Personnel Management that it would pause contributions to a government pension plan, expected to conserve roughly $2.5 billion through Sept. 30, the end of the current fiscal year.
In its recent statement, USPS said it continues to request administrative and legislative reforms, including increasing the agency’s debt limit to $15 billion and allowing diversification of pension assets.
Without these changes, the USPS’s financial outlook “remains dire,” the postal service warned.
Keep US Posted, a nonprofit advocacy group, criticized USPS’s handling of its financial situation in a July 9 statement.
Kevin Yoder, the group’s executive director, said in the statement that USPS’s Delivering for America plan has failed to keep its promises. The plan, implemented in 2021, aimed to boost the postal service’s financial and operational efficiency.
When the plan was unveiled, the then postmaster general projected USPS to break even by fiscal year 2023 due to measures such as operational service cuts and frequent postal rate increases.
However, “USPS has lost more than $30 billion since then—despite the Postal Service Reform Act of 2022, which eliminated $120 billion in liabilities,” Yoder said.
“Any agency that has received such massive financial and balance sheet aid, yet continues to lose money and forecasts insolvency in only a few years, requires stronger supervision to meet the expectations of Congress and its customers,” the executive director said.
While USPS requires short-term financial relief, the agency must be put under stronger oversight of the Postal Regulatory Commission, with postal price increases limited by an inflation-based price cap, Yoder added. On July 12, USPS raised the price of its First-Class Mail Forever stamps from 78 to 82 cents.
During Aug. 7 remarks at the USPS Board of Governors Meeting, Steiner highlighted the importance of having the authority to raise prices.
Pricing is one of the levers the USPS has to grow revenues. In market-dominant products, USPS has been raising prices consistently, which has led to rising mail revenues, Steiner said, adding that total revenues have increased despite a decline in mail volumes, precisely because of the price increases.
“Use of our pricing authority is absolutely necessary to improve our financial sustainability, and we need to be given more flexibility if we are expected to cover our costs,” Steiner said.
